Atlanta Real Estate Investors Alliance Blog

The 4th edition of The Profit, the official newsletter of the Atlanta Real Estate Investors Alliance (Atlanta REIA), is out for the month September 2012! Read and enjoy a variety of articles on real estate investing and more from Don DeRosa, Jeff Nix, Larry Harbolt, Russ Hiner, Mike Barnes, Bob Massey, Erven Kimble, Jim Hitt, Deborah Harris, Michael Vazquez, Tony Pearl, Robyn Thompson, Kathy Kennebrook, Craig Halperin and Chris Littleton. And don’t forget, Atlanta REIA Business Members can advertise in The Profit at discounted rates.

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“An agreement cannot be the result of an imposition” ~ Nestor Kirchner

Imagine. You have a hot lead in your hands that could make you thousands in the next 30 days. Tens of thousands. Appears to be a decent house. Needs a little updating. Good neighborhood. Great schools.

But the owner tells you he’s talked to other investors. He tells you, “Don’t bother to come if all you’re going to do is make a low offer.”

So…do you go? Even if you’re going to make a low offer.

The answer is yes. Always yes.

You’ll go because you’ll get a ‘yes’ to your offer. You’ll be prepared. You’ll do your due diligence and analyze the numbers. And unlike the other investors, you’ll have a tool that will explain the numbers, explain why your offer is reasonable. Your tool will negotiate for you. In fact, you will become the seller’s advocate. You’ll try to make the numbers work, for both of you.

Even if your offer is tens of thousands less than the seller wants out of his house, you will get them to say ‘Yes.’ Read More→

AquaGuard has been associated with Real Estate Investment Associations for many years.  They are sensitive to the wants and needs of investors because of their real estate involvement with due diligence periods as well as what is trying to be accomplished for either the seller or buyer.  The options for repair can be very different.  AquaGuard’s written price protection guarantee insures investors get the absolute best repair with the best nationally backed transferable warranty in the industry at the absolute best price.

The AquaGuard mission statement reads:  To create a positive, growth oriented, team environment allowing individuals to improve and promote their quality of life through the opportunities within the company achieving the highest standards for all in our industry. Through these goals we will out shine our competitors with professionalism and integrity, delivering the highest levels of customer service and quality workmanship available to far exceed our customer’s expectations.  Says owner, Tom DiGregorio, “Even though we are the most award winning company in our industry, we come to work each day building our reputation and never relying on it. Read More→

Today I am seeing all too many investors making mistakes that are costing them thousands of dollars of profit every year simply because they lack focus. Any truly successful investor will tell you that you must focus on what you are doing and become the very best at what you have chosen. Having been an investor for over thirty years, I learned there are five common reasons why many investors fail to make more money, especially in today’s market of properties with mortgage balances higher than what the properties are worth and thousands more properties in the foreclosure process.

Believe it or not, there are many more properties that are not over-leveraged and have a possibility of being bought at a fair price without wondering if a Bank will take your low-ball ALL CASH offer. To be able to better understand what the problems most investors face I want to talk about what I believe are the five most common mistakes most investors make. Read More→

There is a house located in a working class neighborhood.  The Realtor is offering it for $60,000. It is a 3/2 bath house in average condition,  10 years old and 1200 sq ft with a one car carport. Taxes are $950/year. Insurance is $850/year.

The repairs are quoted by a shade tree contractor for $9,500. This would get you paint inside and out, carpet, counter top, and door knobs. The roof is 10 years old, the hot water heater is 3 years old, and the bath room is 10 years old. I figure since owner does not recognize that the house smells like smoke and cat urine, the 3 cats must be smoking 2 packs day and using the whole house as a litter box. The house has a floor plan of a split foyer, average schools,  and average shopping. You live 45 minutes from the house. You like your house and you are not moving. The houses in the subject house area are selling for about  $59.16/ SQFT. The rents in the area are $ 875/ month. Your situation is you have $12,000 for a down payment, repairs, and everything.

What should you offer? To answer these questions…answer these questions. What is your exit strategy? How much cash do you have? How good looking are you? (This allows you to get more money) Do you know people how have cash? Read More→

Have you created a mobile friendly version of your website(s) yet? If not, why not? Your customers are not going to wait until you do. Statistics are warning us of this! With more people accessing your website/blog, Twitter posts and Facebook posts using their smartphones, they are also visiting and seeing your marketing with a smartphones as well.

If your website is not easily readable on a mobile phone, you’re in trouble since many (or most) mobile users will simply leave your site and take their business elsewhere. More than half of all users say they wouldn’t recommend a business with a bad mobile site. So even if you don’t think you need a mobile version of your site, you could, in fact, be losing customers without one.

Having a mobile friendly website, amongst other things, will render your images differently, helping on load times. Readability is also another huge concern. Your average mobile user will not want to spend much time trying to find the content that they’re interested in.

The art to designing a good mobile website is to eliminate all the content that is not all that important for users to see on a smartphone. Consider providing a clean and easy way for customers to “tap to call”, “tap to email” or “tap for directions” which will help the overall functionality and effectiveness of your website on a mobile device. Read More→

The majority of mortgages in the United States are sold into securitized trusts called REMICS and are not held as in-house or “portfolio” loans.  All sub-prime loans are sold off in this way and have been since the late 1960s.  The practice became especially common in the 1990s when the writing of sub-prime loans became more prevalent.  Many prime loans also wind up sold as mortgage-backed securities.

REMIC is short for Real Estate Mortgage Investment Conduit.  They are investment vehicles which hold commercial and residential mortgages in trusts and then issue securities representing an undivided interest in these mortgages.  Investors, such as insurance companies, pension funds, and wealthy private investors, buy these mortgage-backed securities.  The securities are assembled into pools called tranches according to their level of risk.  Higher risk mortgage-backed securities command higher rates of return.  REMICs are managed by a trustee, often a large investment bank, and are governed by pooling and servicing agreements (PSAs). Read More→

“My child, if you have put up security for a friend’s debt, or agreed to guarantee the debt of a stranger; if you have trapped yourself by your agreement and are caught by what you said— follow my advice and save yourself, for you have placed yourself at your friend’s mercy. Now swallow your pride; go and beg to have your name erased. Don’t put it off; do it now! Do not rest until you do. Save yourself like agazelle escaping from a hunter, like a bird fleeing from a net.” (Pr 6:1-5)(NLT)

By definition, a co-signer is obligated to pay when the other person defaults on their obligation. A promise to pay another person’s debt is an entrapment by one’s own words. So when the borrower fails to make the payments, the creditor can come after the other person that has signed and agreed to be responsible for re-payment of the loan. In such cases, the borrower receives the benefit and the pleasure, and the co-signer receives the obligation and the burden to re-pay the debt.

Even if the borrower pays on time, the full amount of the unpaid loan will negatively count against the co-signer’s debt-to-income ratios (DTI). This DTI formula is used to help determine if a person has more debt than they can handle. So, since the co-signer is also responsible for paying off the loan, that debt may hamper their ability to get a mortgage, other financing or other benefits that depend on a good credit score. Read More→

The Dream

George L., a client of American IRA, LLC, wanted to purchase a 56 unit, 1.2 million dollar mobile home park inside his IRA account.

The Details

George was determined to make this dream a reality and worked hard in negotiations with the owner of the mobile home park finally settling on these details:

• Purchase price $1,200,000
• Down Payment $200,000 from an old 401(k) plan
• Owner financing $1,000,000 at 6% interest

A Word of Caution about Loans inside an IRA

The American IRA account specialist informed George that the owner financing needed to be “non-recourse” to qualify for IRA financing.

The account specialist explained further that “non-recourse” means the property is the only collateral; neither George L. nor his IRA can be held liable.

George went back to the table with the owner and was able to negotiate non-recourse terms for the owner financing. Read More→

Up to this point the sellers that have been mentioned had no interests in being investors. They usually saw the extra property as a burden of some sort. Now negotiating with a fellow investor is different because they know the value of their property and/or its’ potential. When negotiating with an investor you need to be at the same experience level. If you are new to real estate investing and are trying to “fake it til you make it” in negotiating with seasoned investors, they will see right through you and move on to another buyer. Admit that you are new to investing and the selling investor may even cut you a deal to assist you in getting started. There are two distinct seller investors one of which are investors selling to retire or just wanting out of investing and then there are investors that are just checking to see what they can get for their property but are impartial to whether is sells or not. Read More→